MiFID II transaction reports

The new MiFIR transaction reporting rules came into force across Europe at the beginning of January 2018. Despite the predominantly positive market feedback, many market participants and especially asset managers are nevertheless facing major challenges in implementing the new reporting obligation.

Sometimes the biggest challenge for many asset managers was and is meeting the cross-organisational data requirements of the new transaction reports. Thus, not only instrument- and transaction-specific data is relevant anymore, but also HR- or customer-identifying information has to be provided in the reports. In particular, obtaining and maintaining reference and customer data, such as the legal entity identifier, continues to be a challenge.

Shortly before the start of MiFIR transaction reporting, the European Securities and Markets Authority (ESMA) surprised many affected business entities with its interpretation of outsourced portfolio management. Accordingly, investment firms remain obliged to submit a transaction report even if they have delegated the entire processing from portfolio management to trade execution to a third party. This presents the delegating party with the problem that often the relevant data is not available or the third party is not yet subject to the reporting obligation or has started to implement its own reporting solution.

The reporting of corporate actions is just one of the many open issues where market participants are in need of a clearer interpretation by ESMA. While there are pushes here and there by market participants to make announcements, there is still a large number that would rather wait and see and withhold announcements on corporate actions. Furthermore, it is to be expected that there will be further interpretative decisions by ESMA and the national supervisory authorities similar to the implementation of the European Market Infrastructure Regulation (EMIR).

With our in-depth understanding of regulatory requirements, a broad understanding of the operating models of asset managers and investment companies, as well as our practical project experience, we also support you after entry into force with post-go live gap analyses or in the successful completion of your ongoing project.

KPMG Investment Management provides you with comprehensive support on all issues relating to transaction reporting obligations under Article 26 MiFIR.